Pacific Gas and Electric’s request for major rate hikes over the next four years, following substantial increases this year, provoked an outpouring of customer complaints during recent public forums held by the California Public Utilities Commission.
PG&E said it needs a huge boost in its 2023-26 General Rate Case (GRC) in part to pay for electric system upgrades to prevent wildfires.
In one CPUC forum Tuesday, however, residents objected to PG&E receiving more money for grid hardening to prevent wildfires after years of deferred maintenance and lax vegetation management led to some of the worst fires in state history over the last five years.
“I think these are unreasonable increases, and PG&E needed to address some of their problems years ago,” Bernadette Mcewen, a senior citizen from rural Tuolumne County, told two CPUC commissioners and an administrative law judge. “What are we going to expect from these increases? Just further increases, I would assume.”
Mcewen said her electric bill had increased by more than 20% since 2018.
PG&E “shareholders also need to take the burden of future [wildfire] prevention,” she said. “I do not believe that this hefty increase should be shouldered completely by the ratepayers.”
The combination of wildfire mitigation efforts, rising natural gas prices and California’s transition to renewable energy have led to steeply rising bills for customers of the state’s three largest investor-owned utilities, including Southern California Edison and San Diego Gas & Electric.
PG&E customers have borne the worst of it. The utility’s electric ratepayers were hit with a $1 billion rate hike in January followed by a $1.1 billion increase in March. The increases were mainly driven by higher-than-expected prices for natural gas, used in generation, and newly imposed FERC transmission-rate requirements.
Together, the increases worked out to a 19% rate hike in the past two months, or about $28 per month for the average customer.
In its 2023-26 GRC, now before the Public Utilities Commission, PG&E asked for a $15.5 billion base revenue requirement for its gas and electric operations — an “unprecedented” 30% increase over its 2020-22 GRC, according to the CPUC’s Public Advocates Office, which filed a protest in the matter.
That could translate to a 16% rate hike for residential electric customers in 2023 and a cumulative 23% increase through 2026. Combined with this year’s rate hikes, customers could see a 42% increase in their electric bills in five years. Average residential customers who paid about $135 per month last year would pay $186 by 2026.
In its protest, The Utility Reform Network (TURN) called the proposed rate hikes “shocking increases … not seen before in a major utility’s general rate case.”
The costs could be far higher than the GRC suggests, especially if the CPUC eventually approves a PG&E proposal to bury 10,000 miles of power lines in high-threat fire districts, TURN said.
Cost estimates for the effort have been scanty until recently, but information provided by PG&E to RTO Insider this week shows an estimated cost of nearly $11 billion for the undergrounding effort from 2022 to 2026. State and federal infrastructure funding could potentially pay for some of the effort, but ratepayers would likely have to absorb a significant share.
In the meantime, PG&E has asked for more than $1 billion in its GRC to prevent wildfires following five years of catastrophic blazes ignited by PG&E equipment. The money would pay for grid hardening and upgrades including undergrounding about 170 miles of power lines in and around Paradise, the town destroyed by the PG&E-caused Camp Fire in November 2018.
“PG&E’s most important responsibility is the safety of our customers and the communities we serve,” the utility said in its amended application filed March 10. “Our GRC forecast includes reasonable costs required to provide safe and reliable service and follow best industry practices.”
“Regulations require PG&E to take certain actions,” it said. “As an electric utility, PG&E’s wildfire mitigation proposals in this GRC follow the legislature’s mandate to ‘construct, maintain and operate its electrical lines and equipment in a manner that will minimize the risk of catastrophic wildfire posed by those electrical lines and equipment’ and achieve ‘the highest level of safety, reliability and resiliency.’”
The utility also asked for $900 million for its move from its century-old San Francisco headquarters, which it agreed to sell last year for $800 million, to its new building in nearby Oakland.
Other major expenses include a $220 million increase for utility pole and meter replacements, $172 million for new customer connections and upgrades associated with electric-vehicle adoption, and $168 million for hydropower plant improvements, the CPUC said in a summary.
PG&E’s 2023-26 rate case is a new four-year combined gas and electric plan ordered by the CPUC. Prior GRCs were two years, with gas and electric filings weighed separately.
The CPUC will decide PG&E’s rate case later this year. The plan is scheduled to take effect Jan 1, 2023
